Legal Concepts for Founders
handbook.clerky.com
handbook.clerky.com
The US does a lot of things differently to Europe, perhaps most famously employment. The US (unsurprisingly) takes the capitalist approach and sides firmly on the side of the company. Europe stands firmly on the side of the employee. Employment Law in Europe is a very complex topic indeed. There are tons of things you can do as a US employer that in Europe would be guaranteed to put you infront of an Employment Tribunal with expensive results.
Therefore I would strongly caution about trying to transpose an article about US company formation and operation to an EU context. You are likely to be wasting your time, frankly, as the nature is so very different.
oh that's how it works over there, that's why I always hear people say X which up until now made absolutely no sense!
As a European living and working in the U.S I now know about starting a company here, thanks.
However your second point makes no sense. Why, in that context, would you say "Interesting read for a European" ?
If you're looking at it from the eyes of somebody living in the US wishing to establish a company in the US then you are no longer reading it as "a European".
To answer your first question, dilution has little to do with how you structure the equity and more to do with the price at which you sell it (and how much of it you sell). The more your company is worth, the less you will need to sell to raise the same amount of money.
A bunch of older threads on here went down the path of "you're going to get fleeced by your VC, just accept it because they have infinite lawyers."
If you’re anywhere close to taking your company public, you should have attorneys that can help you with preparing for that and point you to whatever information you’re looking for.
At the time of investment, good VCs typically don’t care about any one investment enough to put much effort into fleecing you. My experience is that good startups aren’t at any significant disadvantage in terms of attorneys. Just make sure to get a good one that has done a lot of financings.
I know nonvoting shares are usually a hard sell, but I've seen people pull it off. It's worth reminding investors that they are giving you their money on loan because they do not have business ideas, you do.
> Forming a corporation helps protect the founders from personal liability. If the corporation is sued, the assets of its founders are more likely to be protected.
Hmm... I guess this means that by forming a corporation, there's no guarantee that a founder's assets will be protected.
All depends on the country.
Anyone can do that. You’re just forming a contract between both a corporate entity and a natural person, with clauses requiring the natural person to cover the obligations the corporate entity, if the corporation fails to fulfil its obligations.
The natural person in this cases doesn’t have be a founder, or company owner. It could even be another larger corporate entity that’s less likely to vanish overnight.
But none of this changes the protections a corporation gives its owners, it’s just that the owner are choosing to sign contracts that make them personally liable for failures of the corporation.
All that depends on the legal entity form used, which is especially in Europe quite interesting.